Wednesday, September 11, 2013

The New Dow Jones Service Average

According
to the S&P Dow Jones Indices the DJIA today serves the same purpose for
which it was created – to provide a clear, straightforward view of the stock
market and, by extension, the U.S.
economy.

I
wonder if these guys were on drugs when the keepers of the Dow Jones industrial
average gave the boot to Bank of America Corp., Hewlett-Packard Co. and Alcoa
Inc. and replaced them with the consumer and service related Goldman Sachs
Group Inc., Visa Inc. and Nike Inc.

Now
there are only six companies in the Dow that make industrial stuff that lasts
for more than a year namely, The Boeing Company, Caterpillar Inc., E. I. du
Pont de Nemours and Company, General Electric Company, 3M Company and United
Technologies Corp. The bulk of the Dow is now related to consumer and service
companies to include food, financial and health care - along with three technology
companies and two energy companies.

So
we have the likes of Visa (and American Express Company). Nike, The Walt Disney
Company, The Coca-Cola Company, The Home Depot, Inc., McDonald's Corp. and Wal-Mart
Stores Inc. providing “straightforward view of the stock market and, by
extension, the U.S. economy.” The “new” Dow needs a name change: to the Dow
Jones Service Average.

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About Me

Bill has been writing a weekly business column in the Toronto Star since 1997, and was an early contributor to the former “Report on Business Television”. He has founded the Getting Technical Market Newsletter in December 1998.
Bill is also an Instructor for the Canadian Securities Institute. He is also a contributing author of the textbook for the technical analysis course offered by the Canadian Securities Institute (CSI. He is also called upon to provide training to industry professionals on technical analysis at many of Canada’s leading brokerage firms.
In February 2010 Bill became a technical sub-advisor to Stonebrooke Asset Management Ltd. who manages the Hybrid Investment Program under the Elite Wealth Strategies program for Union Securities Ltd..
The relationship ended in Feb 2012 but over the 24 month period the Hybrid Program enjoyed five technical selections that were the subject of takeover bids namely, Gerdau Ameristeel, El Paso Corp, Biovail Corp. Viterra Inc. and ShawCor Ltd